1H 2012 Results. July 23 rd, 2012

Transcription

1 1H 2012 Results July 23 rd, 2012

2 Disclaimer In addition to figures prepared in accordance with IFRS, PRISA presents non-gaap financial performance measures, e.g., EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA margin, adjusted EBIT, adjusted net profit, free cash flow, gross debt and net debt, among others. These non-gaap measures should be considered in addition to, but not as a substitute for, the information prepared in accordance with IFRS. Non-GAAP financial performance measures are not subject to IFRS or any other generally accepted accounting principles. For further information relevant to the interpretation of these terms, please refer to the Reconciliation Section of the 9M 2011 earnings press release filed with the Securities and Exchange Commission and posted on prisa.com. This document may contain forward-looking statements as defined in Section 27A of the Securities Act and Section 21E of the Exchange Act, including statements about the financial conditions, results of operations, earnings outlook and prospects of the Company. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Forward-looking statements are based on management s current expectations and are inherently subject to uncertainties and changes in circumstance and their potential effects and each speaks only as of the date of such statement. There can be no assurance that future developments will be those that have been anticipated. These forward-looking statements are typically identified by words such as plan, believe, expect, anticipate, intend, outlook, estimate, forecast, project, continue, could, may, might, possible, potential, predict, should, would and other similar words and expressions, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements involve a number of risks, uncertainties or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described in our filings with the Securities and Exchange Commission under Risk Factors. 1

3 1H 2012 Highlights 1. Education, Pay TV & Latin America continue as main sources of growth a) Education EBITDA +5.6%, with campaigns strong across most countries b) PayTV EBITDA up +8.8% with growth in subscribers and stable ARPU c) Latin America EBITDA up +11.5%, representing over 48% of total EBITDA 2. Advertising in Spain & Portugal under pressure, but only account for 17.3% of revenues 3. Digital Area advertising revenues up 14.4%. Unique browsers up 8.2% on average Strong growth of Digital advertising in Press (+24,1%) 4. Strong focus on cost control and efficiency. Recurring opex down 4.2% 5. Operating cash flow reached million Euros 6. Two important recapitalisation deals approved in AGM (June 30 th 2012): change in conditions of minimum preferred dividend for B shares, and 434m mandatory convertible bond 2

4 Extraordinary Adjustments in 1H Extraordinary Redundancy Expenses Impact ( m) Efficiency plan taking place since December 2010 Main impact in 2011, throughout all business lines Expenses +30, Dédalo Consolidation Impact ( m) Dédalo integrated through equity method until March 31 st Sale of commercial printing division and exercise of call option over the stake of Dédalo not held by PRISA led to: Global consolidation of Dédalo P&L from April 1st 2012 Consolidation of Dédalo s debt (already guaranteed by PRISA prior to deal) 2012 Revenues EBITDA Net debt consolidation Guaranteed Debt ONO Agreement Impact ( m) 108,75m payments made by PRISA to ONO in on the back of several lawsuits between both companies. Out of court settlement with ONO reached in 2Q 2012 by which: ONO pays PRISA 54,37m PRISA registers extraordinary provision for the amount not recovered ( 54,37m) 2012 EBIT

5 Underlying Group Performance Revenues 6.2% EBITDA 14.8% Pay TV EBITDA of 86.52M (+8.8%) Total net adds +40,968 in 1H 2012 YOY, with DTH -36,135 & other operators +77,103 ARPU at 42 Education EBITDA 84.44M (+5.6%) Strong performance LatAm (+8.2% revenues, EBITDA +10.1%) Spain revenues -8.3% Digital advertising revenues 17.24M (+14.4%) Digital press advertising revenues (+24%) represent 18% of total press advertising revenues Average daily unique browsers to Prisa websites up 8.2% to 71.1m SER remains absolute market leader, International Radio advertising revenues up by +13.5% 4

6 Diversification compensates for weak macro environment Exposure to non cyclical businesses High exposure to strong growing LatAm Jan Jun 2011 Jan Jun 2012 Jan Jun 2011 Jan Jun % 10% 6% 3% 35% 8% 6% 1% Latin America 23% Latin America 27% 23% 26% 77% 73% 1% 23% 1% 22% Spain, US & Portugal Spain, US & Portugal DTH Subscribers Subscribers from other operators Advertising Books & training Audiovisual production Newspapers & magazines Other Revenues: 1,351m Revenues: 1,267m Subscribers already account for 36% of total revenues, most of which from DTH. Advertising accounts for just 22% of total revenues, of which 22% is LatAm. Education showing a strong contribution (26%), with a strong performance across the board Latin America strong results: Revenues +10.0% (Education +8.2%, Advertising +13.5%), EBITDA grows by 11.5%. Latin America share of total revenues to 27% from 23% in 1H Latin America share of total EBITDA up to 48.2% from 36.8% in 1H

7 Pay TV: Strong Performance Revenues 0.1% EBITDA 8.8% Canal+ revenues have remained stable (-0.1%) with growth in subscriber revenues & advertising and lower audiovisual rights sales, services & fiscal deductions. Strong improvement in Key Performance Indicators YOY: Total number of subscribers increased by +46,968 in 1H YOY. Positive impact of wholesale agreements and OTT leading to 100,209 subscribers in 1H 2012 (vs 23,106 in 1H 2011) DTH ARPU stands at 41.7 from 41.2 in 2Q 2011 (an average of 42.0 in 1H 2012 from 41.3 in 1H 2011) Average Churn for 1H 2012 at 13.4% vs 14.9% average in 1H iplus penetration up to 33.2% from 23.5% in June 2011 Multiplus penetration up to 14.5% vs 12.2% in June 2011 EBITDA increase by 8.8% in the 1H

8 Pay TV: KPI s show very good progress iplus penetration growing (Millions of Subscribers and Penetration Rates) 21% 24% 26% 29% 30% 33% 17% 5% 6% 9% 14% Multiroom penetration increasing (Millions of Subscribers and Penetration Rates) 2% 2% 3% % 104 9% 11% 12% 13% 14% 14% 14% Total Subscribers & Net Adds Higher Satellite ARPU ( ) Total Subscribers June 2012 DTH 1,731,140 +0,88 +0,55 Other Platforms/OTT 100,209 TOTAL 1,831,349 YTD Net Adds June 2011 June ,5 42,4 41,7 41,2 40,1 41, DTH -5,581-25,045 Other Platforms/OTT +11,388 17,962 TOTAL +5,807-7,083 1Q 2Q 3Q 4Q 7

9 Media Capital: Still suffering from weak Portuguese market Revenues 23.0% EBITDA 25,9% Very weak performance of Media Capital as a reflection of the weak economic conditions and advertising market in Portugal. However, TVI maintains leadership in Portugal: audience share up in: 24hrs: 27.1% in 2Q 2012 vs 26.3% in 1Q 2012 and vs 26.4% in 1H 2011 Prime Time: 31.0% vs 29.2% in 1Q 2012 and vs 30.5% in 1H 2011 Additional negative impact from deconsoldation of Socater & Productora Canaria de Programas or PCP (now equity consolidated vs global consolidation in 2011). Excluding this impact: Revenues -17.4% EBITDA -23.5% Focus remains on cost control: Costs down by 22.2% (or 15.9% excluding the impact of deconsolidation of Socater and PCP) 8

10 Education: Strong performance across most countries Revenues 5.1% EBITDA 5.6% Strong campaigns practically across the board: Mexico +9.4% revenues USA +28.6% Argentina +13.1% Chile +6.4% Peru % Brazil weaker given natural cyclicity (3.26% at constant currency with EBITDA up by 9.9%) Venezuela weaker as part of 2011 campaign was advanced in 1H (-23.6%) Spain Revenues fall by 8.3%, Education (-5.7%) with campaign still only getting started General Publishing (-6.5%) EBITDA margin reached 25.2% from 25.1% in the 1H

11 Radio: Continued outperformance in Latin America Revenues 8.4% Spain advertising revenues declined (-15.8%), affected by weak local advertising (-25.2%) and deterioration in national advertising (- 6.4%) Latin America advertising revenues up 13.5%. LatAm revenues account for already account for 39% of revenues (31% in 1H 2011) SER maintains absolute leadership EBITDA Increasing weight of LatAm % Latin America 31% Latin America 39% 30 69% 61% Spain Spain 1H H

12 Press: Weak advertising market and circulation Revenues 20.7% EBITDA % 13 Weak advertising, with revenues down by 15,3% in the 1H Weakness in printed advertising but good performance of digital press advertising revenues: +24.1%, representing 18.1% of total in this division. Circulation fell by 12.2%: El País (-10.4%), AS (-5.8%), Cinco Días (-4.3%) We highlight the positive impact in 1H 2011 of an individual promotion which has not taken place this year Other Revenues in press during 2011 were affected by a 14.5m fiscal deduction which has not taken place in 2011 EBITDA fell by 58.6%, but excluding the impact of the fiscal deduction, EBITDA would have fallen by -26.7%. Focus on cost control remains given difficult environment. 11

13 TOTAL ELPAIS.com AS.com 5Dias.com Radio Spain Radio Latam Media Capital Digital: Strong Growth Continues Across Platforms 65,7 71,1 Millions of Unique Browsers January June 2011 January June 2012 Revenues down 7% mainly on lower subsides and fiscal deductions (excluding these, revenues would have grown by 14.8%) Online advertising revenues grew by +14.4%. Average number of unique browsers grew by 8.2% and reached 71.1m, thanks to strong performance of Prisa- TV, elpais.com, and cincodias.com 30,1 25, ,6 Digital development remains strategic priority for the company and one of its growth drivers 2,1 2,9 7,9 8,3 7,4 5,9 5,4 5,9 Source: Omniture, Netscope, and Certifica.com 12

14 Cash Flow generation Cash Flow Cash Flow in 1H 2012 includes: m of Capex m of Working Capital investment m from the Warrants execution m of Financing to Associates Working Capital investment is due to: Santillana (given several pending payments from 2011 made), Prisa Pay TV (has not faced extraordinaries such as ONO sentence or Espanyol and positive impact of ONO agreement, payments for football rights not yet been made) The 150 million from warrants exercise are not fully included in the CF statement as 100m have been directly employed to reduce debt, so only 50m are included as cash inflow. * All Group and business unit figures are Adjusted (exclude non-recurring items) 13

15 31/12/2011 Dedalo Cash Flow Other Warrants Oth.Fin.Debt 30/06/2012 Total Net Debt position , Total Net Debt ( m) +90,5 +0,4 +6, Other Financial Debt Net Financial Debt 3,370 Total Net debt falls from 3,533.58m to 3,370.33m on the back of: Consolidation of Dédalo s debt increases debt by 90,48m Negative Free Cash Flow generation, increases debt by 0.44m Other FX impact, debt formalization & refinancing costs etc, which increase debt by 6,33m 75m warrants exercise, from which 100m are directed to debt reduction ( 50m included as cash inflow) Other financial debt, which reduces debt by 161m as a result of: m from updating NPV of obligation to pay dividend to DLJ + 2.9m from preferred dividend on early conversion of B shares June m of Liberty Liability reclassified against Reserves (which as of Dec 2011 stood at 177.2m) 14

16 Important recapitalisation deals approved in 2012 AGM Recapitalisation Deals Change in conditions of preferred dividend for B shares: Possibility to pay annual divided & dividend accrued in case of early conversion in cash, shares (at1 /share) or a combination of both, at the Company s decision. Payment of the 2011 dividend in shares. Issue of mandatory, 2 year, convertible bond ( 1,03/ share) in 2 tranches: Tranche A: 334m for creditor entities. Commitment of full subscription by HSBC, Santander & Caixabank Tranche B: 100m for Telefónica. Commitment of full subscription A very positive impact Net debt, ceteris paribus, 650m lower in 2014 than it would have been without these deals - 230m if payment of all dividends done in shares - 434m from issue of convertible bond + 15m from increased financial expenses on the back of these deals (contemplated in issue premium) Liquidity situation relieved short term Dilution limited as both deals approved above market prices. Deals demonstrate support of PRISA s creditor banks and its strategic partner (Telefónica) Deals to lead to a reduction of risk premium of PRISA s shares. Positive for B shareholders, given higher fundamental value of A shares to be received as part of dividend and certainty re payment of the remaining dividends. Focus on deleverage to continue going forward 15

17